Weekly round-up: Indian semi-finished steel prices volatile

Indian spot steel trade remained limited during Week 36 (30 Aug-4 Sept'21). Participants said inquiries were less than average and prices slightly dropped in major locations.

Domestic billet prices fluctuated by INR 200-900/t following a major fall in the western region. Sponge iron offers increased by up to by INR 450/t.

The mid-sized finished long steel market via the induction furnace route witnessed limited demand and trade activity this week. Indian re-bar steel prices fluctuated by INR 100-600/t w-o-w. However, in the western region, prices plunged by up to INR 1,400/t.

Iron ore and pellets

• Steel Authority of India Ltd (SAIL) conducted an auction on 3 Sept'21 for 36,000 t of iron ore concentrate (Fe 64.7%-Fe 65.02%) from its Dalli and Rajhara iron ore mines in Chhattisgarh. The tender received active participation with the entire quantity getting booked at INR 3,020-3,080/t, loaded on to rakes, including royalty, DMF, NMET and additional amount as per the MMDR Amendment Act, SteelMint notes.
  
  
• NMDC cut iron ore prices for Sept'21 deliveries by INR 1,000-1,160/t ($14-16/t).
  
  
• JSW Steel scheduled an auction for 23,700 t of Fe 52-55% iron ore fines on 1 Sept'21. The miner did not receive any response in the auction with the entire material remaining unsold.
  
  
• Goa's Directorate of Mines and Geology had conducted the 26th iron ore e-auction on 31 Aug'21. About half of the material, or 0.81 mn t, was booked out of the total of 1.57 mn t on offer.
  
  
• OMC had scheduled an auction for iron ore lumps and fines on 31 Aug'21. The auction received dull participation with lots fetching bids close to the base price. The auction fetched bids for only 238,000 tonnes (t) of iron ore lumps out of the total quantity of 765,000 t and for 20,000 t of iron ore fines out of 902,000 t put up for auction.
  
  
• SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, moved down by around INR 300/t to INR 11,800/t DAP Raipur on 3 Sept'21.
  
  
• SteelMint's pellet export index (Fe 64%, 3% Al, FoB east coast) declined $4/t, w-o-w, and currently stands at $136/t. The index has fallen to its lowest level in over nine months, as per SteelMint data.
  
  
• SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) remains stable, w-o-w, at $44/t FoB east coast India. Exports remain absent on weakening demand outlook in China.
  
  

Coal

• Australian coking coal export prices continued to reach new heights this week, surging by $20/t from Monday on limited supply.
  
  
• Apart from the impact of lockdown measures on trading activity in South East Asia, buying interest was hit by lofty prices.
  
  
• A deal for 75,000 t of premium low-volatile hard coking coal was closed at $269-270/t FoB for November laycan late this week, whereas, last week, contracts for premium material were signed at $248-250/t FoB.
  
  
• Latest prices for the premium HCC grade are assessed at around $269/t FoB Australia, $452.50/t CNF China and $297.30/t CNF India.
  
  
• South African RB2 portside prices rose by INR 600/t on improved demand, averaging at INR 9,800/t ex-Gangavaram.
  
  
• South African RB1 prices rose by $11/t w-o-w to $153/t. Discounts for RB2 and RB3 were assessed at $18/t and $27/t respectively.
  
  

Ferrous scrap

India's imported scrap market sentiments have continued to remain subdued for yet another week. Market players believe that the Indian imported scrap trade is likely to remain subdued amidst disparity in bids and offers, high shipping costs, and shortage of containers.

• Fresh offers for UK/EU-origin shredded were at $520-525/tonne (t) CFR Nhava Sheva, down by $5/t against last week. No buyers were interested in these offers.
  
  
• Dubai-origin HMS 1 offers were heard at around $485/t CFR Nhava Sheva.
  
  
• HMS 1&2 (80:20) from the UAE was offered at $475/t CFR Nhava Sheva.
  
  

Ferro alloys

The overall market saw a downtrend with silico manganese, ferro chrome and ferro silicon prices declining while ferro manganese prices were marginally stable this week.

• Silico manganese prices reduced by around INR 2,000/t w-o-w and were at INR 92,950/t exw-Durgapur while Raipur prices were at INR 93,625/t exw. Low demand from domestic markets created bearish sentiments. The export demand is picking up, but the container availability issue might create some hurdles for the exporters.
  
  
• SteelMint assessed ferro manganese prices at INR 100,300/t exw-Raipur and INR 99,650/t exw-Durgapur. Better demand from steel mills resulted in a marginal fluctuation in ferro manganese prices.
  
  
• Ferro chrome prices fell to INR 113,000/t exw-Jajpur owing to tepid domestic demand. Chinese demand was muted as they expected prices to go down further.
  
  
• Ferro silicon prices from Guwahati remained stable at INR 127,250/t exw despite healthy demand as Guwahati producers were sold out and did not show interest in immediate shipment. However, Bhutanese producers were offering at INR 124,000/t exw.
  
  

Semi-finished

Domestic billet prices fluctuated by INR 200-900/t following a major fall in the western region. Sponge iron offers increased by up to by INR 450/t.

• A State-owned Indian steelmaker had floated an export tender for spot sale of 30,000 t of steel blooms (150x150mm, 3SP/4SP grade) whose due date was 2 Sept'21. The deal was concluded at around $590-595/t FoB.
  
  
• SAIL scheduled an auction for 4,800 t of steel grade pig iron (in 48 units) from Rourkela Steel Plant (RSP) in Odisha on 8 Sept'21.
  
  
• SAIL conducted an auction for 4,000 t (two rakes) of basic grade pig iron on 1 Sept'21 from the Bokaro Steel Plant in Jharkhand and the entire quantity got booked at INR 37,200/t exw.
  
  
• Tata Metaliks reduced pig iron prices by INR 900-1,000/t ($13-14/t), Fresh offers for foundry grade pig iron were reported at INR 41,900/t and for basic grade pig iron, at INR 39,200/t. Prices were exw-Kharagpur and applicable for the Kolkata and Howrah markets.
  
  
• Vizag Steel floated two ocean sale export tenders for around 20,000 t of steel billet (90x90mm, C20MMn Gr. A) and 15,000 t of wire rod coils (5.5-12 mm, grades SAE - 1008/ 1010 / 1012/ 1012S / 1018). Both tenders are due on 6 Sept'21.
  
  
• SAIL held an auction for 8,000 t of basic grade pig iron on 3 Sept'21 from its Bhilai Steel Plant (BSP) in Chhattisgarh. The entire quantity was booked at a weighted average price of INR 37,620/t exw.
  
  
• About 2,000 t of induction furnace (IF) route billet export deals were confirmed this week at around $568-570/t exw-eastern India (Durgapur and Odisha), equivalent to $595-600/t CPT Nepal. The fresh offers stood at $570/t exw-Durgapur.
  
  
• Steel-grade pig iron prices fell by INR 200-500/t across regions due to subdued demand and fall in bids in floated pig iron auctions through SAIL by up to INR 1,000/t. Also, drop in export realisations put pressure on Indian pig iron prices.
  
  
• Indian sponge C-DRI (FeM 80%, lumps 100%) export offers gained by $20/t to $460-465/t CPT Benapole, equivalent to $495-500/t CFR Chittagong, Bangladesh. However, demand remained poor as buyers had sufficient stock along with improved availability and low-cost scrap.
  
  

Finished longs

The finished long steel market manufactured via the induction furnace route witnessed limited demand and trade activity this week. Across regions, rebar steel prices fluctuated by INR 100-600/t w-o-w except in a few and major supplying markets in the western region where prices plunged by up to INR 1,400/t, SteelMint's assessment shows. Weak market sentiments in raw material prices as well as weak buying enquiries in rebar steel in the spot market pressurised the sellers to adjust the trade prices during the week depending upon their previous booking orders and inventories at mills, sources shared.

• The trade reference induction route rebar steel prices of 10-25 mm size Fe 500 grade were assessed at INR 44,300-44,700/t exw-Raipur, and at INR 47,200-47,600/t exw-Jalna.
  
  
• Trade discounts given by Raipur-based heavy structural steel manufacturers were at INR 1,000-1,300/t and trade reference prices of 200 mm angles stood at INR 48,500-48,800/t exw-Raipur.
  
  
• Trade discounts given by Raipur-based wire rod suppliers were at INR 1,200-1,400/t. Trade reference prices stood at INR 44,300-44,500/t exw-Raipur, and at INR 44,300-44,500/t exw-Durgapur, for the 5.5 mm category.
  
  

Finished flats

This week, a few steel giants have announced a roll-over in their list prices for hot-rolled coils (HRC) and cold-rolled coils (CRC) for the September month, majorly on accord of boosting trade activities in the domestic market.

However, domestic prices have continued to remain under pressure over the concerns faced by downstream industries and persistent slow end-user demand.

SteelMint's benchmark price assessments of 2.5-8 mm IS 2062 HRC fell by around INR 800/t to stand at around INR 65,000-65,500/t (exy-Mumbai), and CRC (IS 513 Gr O, 0.9mm) prices dipped by around INR 1,300/t to INR 75,000-76,000/t (exy-Mumbai) as against the previous week's INR 76,500-77,500/t (exy-Mumbai). The prices mentioned above are exclusive of GST @18%.

SteelMint observed market sentiments as below over conversation with market participants-

• The supply crunch of semiconductors faced by auto manufacturers has resulted in an announcement of production outage from a few players like Maruti and Mahindra and Mahinda in Sept'21. Also, most of the auto giants have reported reduced sales in Aug'21 as per their media releases.
  
  
• On the face of sluggish end-users' demand, the inventory movement in the supply chain has got stalled. This, in turn, has bubbled out as a barrier in easing out of inventories with mills in the distribution channel.
  
  

Also, the SteelMint's India HRC export index dropped by $23/t to $879/t FoB east-coast basis this week compared with the previous week's $902/t FoB India over a slump in trade activities in the covid-19 ridden South East Asian countries and summer breaks in European countries alongside exhausted quotas for the Jul-Sep quarter.